ACT ON MORTGAGE OF SPECIFIC MOVABLES INCLUDING AUTOBOBILE. [Enforcement Date: Sep. 26, 2009] [Act No. 9525, Mar. 25, 200, Enactment]
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1 The English version is translated and uploaded only for the purpose of no other than PR, and thereby, Act on Mortgage of Specific Movables Including Autobobile in the Korean language will prevail regarding authorization and permission ACT ON MORTGAGE OF SPECIFIC MOVABLES INCLUDING AUTOBOBILE [Enforcement Date: Sep. 26, 2009] [Act No. 9525, Mar. 25, 200, Enactment] Ministry of Justice (Office of Legal Counsel) Tel.: Article 1 (Purpose) The purpose of this Act is facilitate the accommodation of funds for the provision of mortgages and to equally protect the rights and interests of the mortgagee, mortgagor and owner by prescribing the matters concerning the mortgage of movables subject to registration such as construction machinery, ships to which the Ship Registry Act is not applied, automobiles, airplanes, etc. Article 2 (Definition) The definitions of the terms used in this Act shall be as follows: 1. The term specific movables refers to the construction machinery, small ships, automobiles, and airplanes which are subject to registration: and 2. The term registration authority refers to the government office in charge of the affairs for registration of establishment, modification, transfer and cancellation of mortgages. Article 3 (Object of Mortgage)
2 The movables applicable to the following items may be the object of mortgage: 1. Construction machinery registered under the Construction Machinery Management Act; 2. The ships applicable to the following items to which the Ship Registry Act is not applied (hereinafter referred to as small ship ): (a) Ships other than the ship applicable to each subsection of Article 26 of the Ship Act among the small ships under Article 1-2 (2) of the same Act; (b) Fishing vessels of gross tonnage below 20 tons among the fishing vessels applicable to each items of subsection 1 of Article 2 of the fishing Vessels Act; (c) Motor boats registered in accordance with Article 30 of the Water-Related Leisure Activities Safety Act among the water leisure equipment propelled by engines referred to in subsection 4 of Article 2 of the same Act; 3. Automobiles registered under the Automobile Management Act; and 4. Aircrafts registered under the Aviation Act among airplanes and rotary-wing aircrafts. Article 4 (Contents of Mortgage) A mortgagee shall have the right to collect payment for his/her claim in preference to other creditors on the movables provided by the debtor or a third party as a security for the obligation without moving the possession of such movables. Article 5 (Effect, etc. of Registration of Mortgage) (1) The change of gain and loss of the mortgage shall take effect when the registration thereof is made in the following registers by the object of the mortgage: 1. Construction machinery registers under the Construction Machinery Management Act; 2. Ship registers under the Ship Act; 3. Fishing vessel registers under the Fishing Vessels Act;
3 4. Water leisure equipment registers under the Water-Related Leisure Activities Safety Act; 5. Automobile registers under the Automobile Management Act: and 6. Aircraft registers under the Aviation Act. (2) Registration of mortgage on the specific movables shall be classified as registration of establishment, change, transfer, and cancellation. (3) The matters necessary for the procedures and methods of registration of mortgage on the specific movables shall be prescribed by the Presidential Decree. Article 6 (Notice on the Cancellation of Registration) Where the specific movables on which a mortgage is established applies to one of the following cases, the registration authority shall give the mortgagee a prior notice on the intention of the cancellation of the registration: Provided, that this does not apply where the mortgagee has agreed to the cancellation of the registration on the specific movables. 1. Construction machinery: where intending to cancel the registration according to Article 6 (1) of the Construction Machinery Management Act; 2. Small ship: where intending to cancel the registration according to Article 22 of the Ship Act, Article 19 of the Fishing Vessels Act or Article 33 of the Water-Related Activities Safety Act; 3. Automobile: where intending to cancel the registration according to Article 13 of the Automobile Management Act; and 4. Aircraft: where the application for registration of cancellation is accepted due to the aircraft being applicable to Article 12 (1) 3 of the Aviation Act, or where intending to cancel the registration ex officio as the owner of the aircraft has failed to apply for the registration of cancellation within the period after the notice under Article 12 (2) of the same Act was served.
4 Article 7 (Exercise, etc. of Mortgage) (1) In the event that a mortgagee receives the notice under Article 6, he/she may immediately exercise his/her mortgage on the specific movables concerned. (2) In the case where a mortgagee intends to exercise his/her mortgage according to the provisions of section (1), he/she shall commence the procedures for the exercise of the mortgage within the period in accordance with the following classification from the date of the receipt of the notice under Article 6: 1. Automobile: one month; 2. Small ship: two months; and 3. Construction machinery and aircraft: three months. (3) In the event that the procedures for exercise of the mortgage has not commenced within the period of the commencement of exercise of the mortgage under section (2), the Registration Authority may make the registration of cancellation of the specific movables concerned: Provided, that in the case where a mortgagee has commenced the procedures for exercise of the mortgage within such period of time, the registration authority shall not make the registration of cancellation until the procedures for exercise of the mortgage are completed. (4) In the case where a mortgagee has exercised the mortgage and where a successful bidder has acquired the ownership of the specific movables concerned, the registration authority shall not make the registration of cancellation. (5) In the case where the determination on permission of sale is concluded, it shall be deemed that the application for cancellation of registration under Article 6 (1) of the Construction Machinery Management Act has not been made for the construction machinery, and the causes under Article 12 (1) 3 of the Aviation Act has not occurred for the aircraft. Article 8 (Special Case for Method of Realization by Transfer Order)
5 (1) In the process of an auction for the execution of a mortgage for the object of mortgage (excluding aircraft, and this shall apply hereinafter in this Article), the court may, where it is deemed appropriate, upon request from the mortgagee, recognize such mortgage by the method of issuing a transfer order permitting such mortgagee to sell the seized object of mortgage without resorting to auction or tender. (2) Matters necessary for the procedures of the transfer order referred to in section (1) shall be prescribed by the Regulations of the Supreme Court. Article 9 (Prohibition of Establishing Pledge) The specific movables shall not be the objects for establishing the right of pledge. Article 10 (Delivery of Documents for Registration of Cancellation, etc. of Mortgage) In the event that causes for the registration of cancellation or for the registration of transfer mortgage on the specific movables occur because the mortgage obligation has ceased to exist due to the payment of the debt or other causes, the mortgagee shall, without delay, deliver documents necessary for the registration of cancellation or for the registration of transfer of mortgage on the specific movables concerned to the person who has the right to registration. Article 11 (Fee) (1) A person who intends to register the mortgage shall pay the relevant fees according to the conditions as prescribed by the Presidential Decree. (2) Matters necessary for the criteria for imposition and exemption of fees referred in section (1) shall be prescribed by the Presidential Decree. Article 12 (Provision of Mutatis Mutandis Application) Except as provided in this Act, the provisions concerning the mortgage in the Civil Act shall apply mutatis mutandis to the mortgage on the specific movables.
6 ADDENDA Article 1 (Enforcement Date) This Act shall take effect on the day six months from its promulgation. Article 2 (Repeal of Other Acts) The following Acts are repealed respectively: 1. Construction Machinery Mortgage Act 2. Small Ship Mortgage Act 3. Automobile Mortgage Act 4. Aircraft Mortgage Act Article 3 (Transitional Measures) (1) Notwithstanding Article 9, the right of pledge established on small ships before the enforcement of the Small Ship Mortgage Act (Act No. 8622) shall be deemed to be effective for the duration period of the contract for the establishment of the right of pledge. (2) For the mortgage established on passenger automobiles before the enforcement of the amended Act of the Automobile Mortgage Act (Act No. 4646), it shall be deemed that the mortgage is established according to this Act until the registration of cancellation of such mortgage is completed. Article 4 (Amendment of Other Acts) (1) Part of the Public Waters Management Act shall be amended as follows:
7 The term Small Ship Mortgage Act in the proviso of Article 13 (3) 1 shall be changed to the Act on Mortgage of Specific Movables Including Automobile. (2) Part of the Civil Procedure Act shall be amended as follows: The term Article 2 of the Small Ship Mortgage Act in Article 187 and Article 270 shall be changed to Subsection 2 (c) of Article 3 of the Act on Mortgage of Specific Movables Including Automobile. (3) Part of the Water-Related Leisure Activities Safety Act shall be amended as follows: The term Article 2 (3) of the Small Ship Mortgage Act in Article 33 (2) shall be changed to Subsection 2 (c) of Article 3 of the Act on Mortgage of Specific Movables Including Automobile. Article 5 (Relations with Other Acts) Where other laws and regulations quote the previous Construction Machinery Mortgage Act, the previous Small Ship Mortgage Act, the previous Automobile Mortgage Act, the previous Aircraft Mortgage Act, or the provisions thereof at the time of enforcement of this Act, if there are any provisions applicable to such in this Act, it shall be deemed that such provisions substitute for the previous provisions and this Act or the relevant provisions of this Act shall be quoted.
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